February 23, 2005 9:00 AM PST
Apple pipes in new iPods
The company introduced a higher-capacity, 6GB Mini, along with new 30GB and 60GB iPod Photo models, which can use an adapter to connect directly to digital cameras and display photos. The Minis also feature a boost in battery life.
The new models expand the range of Apple's popular hard drive-based music players and increase the product line's capabilities in digital photography. A $29 camera adapter for the iPod Photo answers the call for connecting the player directly to cameras without the need for a computer as a go-between.
Along with bringing out the 6GB Mini, which costs $249, Apple lowered the price of its 4GB Mini to $199. The 4GB Mini had debuted in January 2004 at $249.
The 30GB iPod Photo costs $349, while the 60GB device costs $449. Previously, Apple offered a 40GB model for $499 and a 60GB version for $599.
The sharp price cut to the iPod Photo line moves the color screen from a premium feature to something that's practically standard--showing up on all but the lowest-end $299 iPod model. Apple Vice President Greg Joswiak said in an interview that he expects many iPod buyers will pay $50 more to get a device with a 50 percent larger hard drive and color screen.
"I have little doubt this will be a very popular model," said Joswiak, who heads iPod product marketing. "Just like you saw with PDAs and cell phones, everything gets better in color."
Apple has been on a low-price tear recently in an effort to reach more consumers. In January, it introduced the flash-based iPod Shuffle, which starts at $99, along with a Mac Mini desktop PC designed to appeal to bargain hunters.
Apple's iPod line has already achieved totemic status in American pop culture and is the clear market leader among portable music players. Moreover, the music player segment overall is enjoying healthy growth. A recent study revealed that 22 million adults in the United States, or 11 percent of the population, own an iPod or other MP3 player.
Apple is clearly out to build on its success, said one analyst.
"If you combine (the $199 iPod Mini) with the Shuffle, it really says Apple is shooting for the moon here," The NPD Group analyst Steve Baker said. The company is "really going after getting as much of this market as it can."
Still, Baker had some questions about how customers would evaluate the questions of device size versus storage space.
"The pricing all works. It's got nice $50 increments," he said. "I think the question becomes, are you adding enough value at each increment and how are customers going to view that? If you're doing a $249 Mini, is (that 2GB of extra hard-drive space) really worth $50 more, or would a customer trade right past that to $299 to get 20GB?" he asked, referring to a 20GB regular-size iPod.
Joswiak said the changes to the iPod lineup are an attempt by Apple to hit every possible part of the market.
"We have all budgets covered," he said.
Gene Munster, a financial analyst at brokerage firm Piper Jaffray, applauded the lower prices as a good way for Apple to defend its turf.
"We believe that Apple's changes to the product line are more offensive than defensive," he said in a research note Wednesday. "We believe
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